The Income Tax department has clarified that the deadline to link PAN with Aadhaar for taxpayers is unlikely to be extended beyond August 31, 2017. Therefore, even if you have filed your return by the ITR filing deadline of August 5 but have not linked your PAN and Aadhaar latest by August 31, your Income Tax Returns (ITR) won't be taken up by the department for processing.
However, if you are not required to file ITR as per income tax laws, i.e., your total income is below the exemption limit of Rs 2.5 lakh in a financial year, the deadline to link the same is yet to be notified by the government.
This raises two questions:
1. What are the consequences of your ITR not being taken up for processing?
2. What will happen to the ITR you have filed if you link your PAN with Aadhaar after August 31?
Here are some of the consequences of your ITR not being taken up for processing, according to Abhishek Soni, CEO, Tax2win.in:
1. If your ITR is not taken up for processing, it will be treated as if you have not filed your returns for the financial year 2016-17. The return filed would become null and void. You may have to face the consequences applicable
2. The income tax department may send you a notice to file your ITR under section 142(1). The assessing officer may levy a penalty of Rs 5,000 for not filing ITR on time.
3. You will not be able to claim or carry forward your losses such as capital loss, business losses etc.
4. It would definitely affect the processing of refunds. The refunds shall not be granted in case ITR is not processed.
5. Interest under section 234 A, B, C will be applicable as the case may be, i.e., if the tax is payable.
You can check if your PAN is linked to Aadhaar by logging into your account on the income tax department's e-filing website under the 'Profile Settings' Tab.Aadhaar by logging into your account on the income tax department's e-filing website under the 'Profile Settings' Tab.
Experts feel that there is ambiguity regarding what will happen to the ITR you have filed if you link your PAN with Aadhaar after August 31.ITR you have filed if you link your PAN with Aadhaar after August 31.
"Section 139 AA (2) of the Income Tax Act says that every person having PAN as on July 1, 2017 and is eligible to obtain Aadhaar, must intimate his Aadhaar number to the tax authorities. Due to additional compliance requirements, this year, government has given relaxation to link PAN and Aadhaar till August 31, 2017. However, it has not clarified what laws shall apply in case an Individual fails to link PAN and Aadhaar," says Chetan Chandak, Head of Tax Research, H&R Block India.
Soni says, "As per the press release issued by the CBDT, you need to link the Aadhaar with PAN before 31st August, 2017. However, as of now, there is no clarity from the government's side regarding what will happen to the filed ITR for the FY 2016-17, if linking is not done on or before 31st August 2017 i.e. whether this will be taken up for processing or not if linking is done after 31st August 2017."
"As such if your return is treated as invalid then the benefits of various exemption or deduction cannot be claimed as the return is deemed to have not been filed. Once the defect is removed, it will be considered as original return and the return filing date will be same as date of original return. Once the return is valid and in conformity with the intended purpose of the Act, such cured return of income cannot be ignored by the department," adds Chetan
Tax return filers should be aware that as per rules they also have to verify their return within 120 days of filing it in order for the return to be taken up for processing. Verification of the return can be done electronically -e-verification or physically by sending ITR-V to the income tax department.
Additionally, the requirement of linking PAN-Aadhaar is applicable only to those individuals who have Aadhaar or are eligible to obtain Aadhaar. Further, as per CBDT notification dated May 11, 2017, the following individuals are exempted if they do not have Aadhaar or Aadhaar enrollment id.
Exempted category are:
(i) Those categorized as Non-resident Indians as per the Income Tax Laws
(ii) Not a citizen of India
(iii) Is of age 80 years or more at any time during the tax year
(iv) Residents of the states of Assam, Meghalaya and Jammu and Kashmir